SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in
smart energy technology, today announced its financial results for
the first quarter ended March 31, 2023.
First Quarter 2023 Highlights
- Record revenues of $943.9 million
- Record revenues from solar segment of $908.5 million
- GAAP gross margin of 31.8%
- Non-GAAP gross margin of 32.6%
- Gross margin from solar segment of 35.0%
- Record GAAP operating income of $144.2 million
- Record non-GAAP operating income of $183.8 million
- Record GAAP net income of $138.4 million
- Record non-GAAP net income of $174.5 million
- Record GAAP net diluted earnings per share (“EPS”) of
$2.35
- Record non-GAAP net diluted EPS of $2.90
- 3.6 Gigawatts (AC) of inverters shipped
- 221 MWh of batteries shipped
“We are pleased with our first quarter results reflecting our
strong global presence and execution capabilities,” said Zvi Lando,
Chief Executive Officer of SolarEdge. “Our diverse geographic and
segmental footprint enables us to continue to grow revenues without
being overly dependent on any single market or segment. As we see
supply chain challenges gradually improving, we remain focused on
execution and efficiencies to drive up margins and
profitability.”
First Quarter 2023 Summary
The Company reported record revenues of $943.9 million, up 6%
from $890.7 million in the prior quarter and up 44% from $655.1
million in the same quarter last year.
Revenues from the solar segment were a record $908.5 million, up
9% from $837.0 million in the prior quarter and up 49% from $608.0
million in the same quarter last year.
GAAP gross margin was 31.8%, up from 29.3% in the prior quarter
and up from 27.3% in the same quarter last year.
Non-GAAP gross margin was 32.6%, up from 30.2% in the prior
quarter and up from 28.4% in the same quarter last year.
Gross margin from the solar segment was 35%, up from 32.4% in
the prior quarter and up from 30.2% in the same quarter last
year.
GAAP operating expenses were $156.0 million, down 41% from
$266.2 million in the prior quarter and up 22% from $128.1 million
in the same quarter last year.
Non-GAAP operating expenses were $123.6 million, up 4% from
$119.0 million in the prior quarter and up 25% from $98.9 million
in the same quarter last year.
GAAP operating income was a record $144.2 million, up from an
operating loss of $5.2 million in the prior quarter and up from
operating income of $50.9 million in the same quarter last
year.
Non-GAAP operating income was a record $183.8 million, up 23%
from $149.6 million in the prior quarter and up 111% from $87.2
million in the same quarter last year.
GAAP net income was a record $138.4 million, up 564% from $20.8
million in the prior quarter and up 318% from $33.1 million in the
same quarter last year.
Non-GAAP net income was a record $174.5 million, up 2% from
$171.5 million in the prior quarter and up 154% from $68.8 million
in the same quarter last year.
GAAP net diluted EPS was a record $2.35, up from $0.36 in the
prior quarter and up from $0.60 in the same quarter last year.
Non-GAAP net diluted EPS was a record $2.90, up from $2.86 in
the prior quarter and up from $1.20 in the same quarter last
year.
Cash flow from operating activities was $7.9 million, down from
$111.3 million in the prior quarter and up from $163.0 million used
in operating activities in the same quarter last year.
As of March 31, 2023, cash, cash equivalents, bank deposits,
restricted bank deposits and marketable securities totaled $1.01
billion, net of debt, compared to $1.04 billion on December 31,
2022.
Outlook for the Second Quarter 2023
The Company also provides guidance for the second quarter ending
June 30, 2023 as follows:
- Revenues to be within the range of $970 million to $1,010
million
- Non-GAAP gross margin expected to be within the range of 32% to
35%
- Non-GAAP operating profit to be within the range of $195
million to $215 million
- Revenues from the solar segment to be within the range of $930
million to $980 million
- Gross margin from the solar segment expected to be within the
range of 34% to 37%
Conference Call
The Company will host a conference call to discuss these results
at 4:30 p.m. ET on Wednesday, May 3, 2023. The call will be
available, live, to interested parties by dialing 800-895-3361. For
international callers, please dial +1 785-424-1062. The Conference
ID is SEDG. To avoid a delay in connecting to the call, please
dial in 10 minutes prior to the start time. A live webcast will
also be available in the Investors Relations section of the
Company’s website at: http://investors.solaredge.com
A replay of the webcast will be available in the Investor
Relations section of the Company’s web site approximately two hours
after the conclusion of the call and will remain available for
approximately 30 calendar days.
About SolarEdge
SolarEdge is a global leader in smart energy technology. By
leveraging world-class engineering capabilities and with a
relentless focus on innovation, SolarEdge creates smart energy
solutions that power our lives and drive future progress. SolarEdge
developed an intelligent inverter solution that changed the way
power is harvested and managed in photovoltaic (PV) systems. The
SolarEdge DC optimized inverter seeks to maximize power generation
while lowering the cost of energy produced by the PV system.
Continuing to advance smart energy, SolarEdge addresses a broad
range of energy market segments through its PV, storage, EV
charging, batteries, electric vehicle powertrains, and grid
services solutions. SolarEdge is online at www.solaredge.com
Use of Non-GAAP Financial Measures
The Company has presented certain non-GAAP financial measures in
this release, such as non-GAAP net income, non-GAAP net diluted
EPS, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP
operating income and non-GAAP gross margin from sale of solar
products. Generally, a non-GAAP financial measure is a numerical
measure of a company's performance, financial position, or cash
flows that either exclude or include amounts that are not normally
excluded or included in the most directly comparable measure
calculated and presented in accordance with generally accepted
accounting principles in the United States, or GAAP. Reconciliation
of each non-GAAP financial measure to the most directly comparable
GAAP financial measure can be found in the accompanying tables to
this release. These non-GAAP financial measures do not reflect a
comprehensive system of accounting, differ from GAAP measures with
the same captions and may differ from non-GAAP financial measures
with the same or similar captions that are used by other companies.
As such, these non-GAAP measures should be considered as a
supplement to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP.
The Company uses these non-GAAP financial measures to analyze
its operating performance and future prospects, develop internal
budgets and financial goals, and to facilitate period-to-period
comparisons. The Company believes that these non-GAAP financial
measures reflect an additional way of viewing aspects of its
operations that, when viewed with its GAAP results, provide a more
complete understanding of factors and trends affecting its
business.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
This release contains forward looking statements which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include information, among other things, concerning: our possible
or assumed future results of operations; future demands for solar
energy solutions; business strategies; technology developments;
financing and investment plans; dividend policy; competitive
position; industry and regulatory environment; general economic
conditions; potential growth opportunities; and the effects of
competition. These forward-looking statements are often
characterized by the use of words such as “anticipate,” “believe,”
“could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “should,” “will,” “would” or
similar expressions and the negative or plural of those terms and
other like terminology.
Forward-looking statements are only predictions based on our
current expectations and our projections about future events. These
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to be materially
different from those expressed or implied by the forward-looking
statements. Given these factors, you should not place undue
reliance on these forward-looking statements. These factors
include, but are not limited to, the matters discussed in the
section entitled “Risk Factors” of our Annual Report on Form 10-K
for the year ended December 31, 2022, filed on February 22, 2023
and our quarterly reports filed on Form 10-Q, Current Reports on
Form 8-K and other reports filed with the SEC. All information set
forth in this release is as of May 3, 2023. The Company undertakes
no duty or obligation to update any forward-looking statements
contained in this release as a result of new information, future
events or changes in its expectations.
SOLAREDGE TECHNOLOGIES
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(in thousands, except per share
data)
Three Months Ended
March 31,
2023
2022
Unaudited
Revenues
$
943,889
$
655,080
Cost of revenues
643,763
476,122
Gross profit
300,126
178,958
Operating expenses:
Research and development
79,873
66,349
Sales and marketing
40,966
35,316
General and administrative
36,567
26,429
Other operating income, net
(1,434
)
—
Total
operating expenses
155,972
128,094
Operating income
144,154
50,864
Financial income (expense), net
23,674
(4,605
)
Other loss
(125
)
(844
)
Income before income taxes
167,703
45,415
Income taxes
29,325
12,292
Net income
$
138,378
$
33,123
SOLAREDGE TECHNOLOGIES
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except per share
data)
March 31, 2023
December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
727,849
$
783,112
Marketable securities
410,820
241,117
Trade receivables, net of allowances of
$4,422 and $3,202, respectively
969,543
905,146
Inventories, net
874,212
729,201
Prepaid expenses and other current
assets
259,642
241,082
Total current
assets
3,242,066
2,899,658
LONG-TERM ASSETS:
Marketable securities
509,127
645,491
Deferred tax assets, net
46,612
44,153
Property, plant and equipment, net
556,138
543,969
Operating lease right-of-use assets,
net
69,710
62,754
Intangible assets, net
17,933
19,929
Goodwill
29,934
31,189
Other long-term assets
24,906
18,806
Total
long-term assets
1,254,360
1,366,291
Total
assets
$
4,496,426
$
4,265,949
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables, net
408,523
459,831
Employees and payroll accruals
90,853
85,158
Warranty obligations
129,278
103,975
Deferred revenues and customers
advances
27,507
26,641
Accrued expenses and other current
liabilities
243,881
214,112
Total current
liabilities
900,042
889,717
LONG-TERM LIABILITIES:
Convertible senior notes, net
625,182
624,451
Warranty obligations
313,693
281,082
Deferred revenues
196,917
186,936
Finance lease liabilities
43,711
45,385
Operating lease liabilities
50,855
46,256
Other long-term liabilities
15,232
15,756
Total
long-term liabilities
1,245,590
1,199,866
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ EQUITY:
Common stock of $0.0001 par value -
Authorized: 125,000,000 shares as of March 31, 2023 and December
31, 2022; issued and outstanding: 56,343,164 and 56,133,404 shares
as of March 31, 2023 and December 31, 2022, respectively
6
6
Additional paid-in capital
1,545,777
1,505,632
Accumulated other comprehensive loss
(77,204
)
(73,109
)
Retained earnings
882,215
743,837
Total stockholders’ equity
2,350,794
2,176,366
Total liabilities and stockholders’ equity
$
4,496,426
$
4,265,949
SOLAREDGE TECHNOLOGIES
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands, except per share
data)
Three Months Ended
March 31,
2023
2022
Cash flows from
operating activities:
Net income
$
138,378
$
33,123
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
13,464
11,660
Stock-based compensation expenses
39,235
34,107
Deferred income taxes, net
(3,930
)
(1,034
)
Loss (gain) from exchange rate
fluctuations
(20,441
)
1,725
Other items
2,810
4,167
Changes in assets and liabilities:
Inventories, net
(141,521
)
(51,323
)
Prepaid expenses and other assets
(20,591
)
(17,163
)
Trade receivables, net
(55,002
)
(224,865
)
Trade payables, net
(50,410
)
(28,045
)
Employees and payroll accruals
10,227
9,246
Warranty obligations
57,864
27,629
Deferred revenues and customers
advances
9,325
15,029
Accrued expenses and other liabilities,
net
28,515
22,755
Net cash provided by (used in) operating
activities
7,923
(162,989
)
Cash flows from
investing activities:
Proceed from sales and maturities of
available-for-sale marketable securities
11,597
53,096
Purchase of property, plant and
equipment
(38,338
)
(43,210
)
Investment in available-for-sale
marketable securities
(38,979
)
(26,712
)
Investment in a privately-held company
(5,500
)
—
Other investing activities
3,440
1,692
Net cash used in investing activities
(67,780
)
(15,134
)
Cash flows from
financing activities:
Proceeds from secondary public offering,
net of issuance costs
—
650,526
Proceeds from exercise of stock-based
awards
75
1,478
Tax withholding in connection with
stock-based awards, net
(4,541
)
822
Other financing activities
(756
)
(491
)
Net cash provided by (used in) financing
activities
(5,222
)
652,335
Increase (decrease) in cash and cash
equivalents
(65,079
)
474,212
Cash and cash equivalents at the beginning
of the period
783,112
530,089
Effect of exchange rate differences on
cash and cash equivalents
9,816
(1,529
)
Cash and cash equivalents at the end of
the period
727,849
1,002,772
SOLAREDGE TECHNOLOGIES
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES (Unaudited)
(in thousands, except per share
data and percentages)
Reconciliation of GAAP to
Non-GAAP
Three Months Ended
March 31, 2023
December 31, 2022
March 31, 2022
Gross profit (GAAP)
$
300,126
$
261,047
$
178,958
Revenues from finance component
(187
)
(174
)
(135
)
Stock-based compensation
5,927
6,810
5,062
Amortization and depreciation of acquired
assets
1,515
961
2,219
Gross profit (Non-GAAP)
$
307,381
$
268,644
$
186,104
Gross margin (GAAP)
31.8
%
29.3
%
27.3
%
Revenues from finance component
0.0
%
0.0
%
0.0
%
Stock-based compensation
0.6
%
0.8
%
0.8
%
Amortization and depreciation of acquired
assets
0.2
%
0.1
%
0.3
%
Gross margin (Non-GAAP)
32.6
%
30.2
%
28.4
%
Operating expenses (GAAP)
$
155,972
$
266,210
$
128,094
Stock-based compensation - R&D
(17,209
)
(16,854
)
(14,985
)
Stock-based compensation - S&M
(8,079
)
(7,928
)
(6,701
)
Stock-based compensation - G&A
(8,020
)
(7,015
)
(7,359
)
Amortization and depreciation of acquired
assets - R&D
(313
)
(301
)
(303
)
Amortization and depreciation of acquired
assets - S&M
(181
)
(173
)
(236
)
Amortization and depreciation of acquired
assets - G&A
(26
)
(4
)
(6
)
Assets impairment
—
(114,473
)
—
Gain (loss) from assets sales and
disposal
(412
)
(93
)
410
Other items
1,846
(359
)
—
Operating expenses (Non-GAAP)
$
123,578
$
119,010
$
98,914
SOLAREDGE TECHNOLOGIES
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES (Unaudited)
(in thousands, except per share
data and percentages)
Reconciliation of GAAP to
Non-GAAP
Three Months Ended
March 31, 2023
December 31, 2022
March 31, 2022
Operating income (GAAP)
$
144,154
$
(5,163
)
$
50,864
Revenues from finance component
(187
)
(174
)
(135
)
Stock-based compensation
39,235
38,607
34,107
Amortization and depreciation of acquired
assets
2,035
1,439
2,764
Assets impairment
—
114,473
—
Loss (gain) from assets sales and
disposal
412
93
(410
)
Other items
(1,846
)
359
—
Operating income (Non-GAAP)
$
183,803
$
149,634
$
87,190
Financial income (expense), net
(GAAP)
$
(23,674
)
$
56,101
$
(5,449
)
Notes due 2025
(731
)
730
728
Non cash interest
(2,161
)
1,955
1,609
Unrealized losses
—
(170
)
—
Currency fluctuation related to lease
standard
2,519
749
(1,792
)
Financial income (expense), net
(Non-GAAP)
$
(24,047
)
$
59,365
$
(4,904
)
Other income (GAAP)
$
125
$
186
$
—
Gain from sale of investment in
privately-held company
—
(186
)
—
Other income (Non-GAAP)
$
125
$
—
$
—
Income tax benefit (expense)
(GAAP)
$
29,325
$
(30,295
)
$
(12,292
)
Income tax adjustment
3,901
(7,186
)
(1,201
)
Income tax benefit (expense)
(Non-GAAP)
$
33,226
$
(37,481
)
$
(13,493
)
SOLAREDGE TECHNOLOGIES
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES (Unaudited)
(in thousands, except per share
data and percentages)
Reconciliation of GAAP to
Non-GAAP
Three Months Ended
March 31, 2023
December 31, 2022
March 31, 2022
Net income (GAAP)
$
138,378
$
20,829
$
33,123
Revenues from finance component
(187
)
(174
)
(135
)
Stock-based compensation
39,235
38,607
34,107
Amortization and depreciation of acquired
assets
2,035
1,439
2,764
Assets impairment
—
114,473
—
Loss (gain) from assets sales and
disposal
412
93
(410
)
Other items
(1,846
)
359
—
Notes due 2025
731
730
728
Non cash interest
2,161
1,955
1,609
Unrealized losses
—
(170
)
—
Currency fluctuation related to lease
standard
(2,519
)
749
(1,792
)
Gain from sale of investment in
privately-held company
—
(186
)
—
Income tax adjustment
(3,901
)
(7,186
)
(1,201
)
Net income (Non-GAAP)
$
174,499
$
171,518
$
68,793
Net basic earnings per share
(GAAP)
$
2.46
$
0.37
$
0.62
Revenues from finance component
0.00
0.00
0.00
Stock-based compensation
0.70
0.69
0.64
Amortization and depreciation of acquired
assets
0.03
0.02
0.05
Assets impairment
—
2.05
—
Loss (gain) from assets sales and
disposal
0.01
0.00
0.00
Other items
(0.03
)
0.01
—
Notes due 2025
0.01
0.01
0.01
Non cash interest
0.04
0.04
0.03
Unrealized losses
—
(0.01
)
—
Currency fluctuation related to lease
standard
(0.05
)
0.02
(0.03
)
Gain from sale of investment in
privately-held company
—
(0.01
)
—
Income tax adjustment
(0.07
)
(0.13
)
(0.03
)
Net basic earnings per share
(Non-GAAP)
$
3.10
$
3.06
$
1.29
SOLAREDGE TECHNOLOGIES
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES (Unaudited)
(in thousands, except per share
data and percentages)
Reconciliation of GAAP to
Non-GAAP
Three Months Ended
March 31, 2023
December 31, 2022
March 31, 2022
Net diluted earnings per share
(GAAP)
$
2.35
$
0.36
$
0.60
Revenues from finance component
(0.01
)
0.00
0.00
Stock-based compensation
0.62
0.64
0.58
Amortization and depreciation of acquired
assets
0.03
0.02
0.05
Assets impairment
—
1.91
—
Loss (gain) from assets sales and
disposal
0.01
0.00
0.00
Other items
(0.03
)
0.01
(0.01
)
Notes due 2025
0.00
0.00
0.01
Non cash interest
0.04
0.03
0.02
Unrealized losses
—
0.00
—
Currency fluctuation related to lease
standard
(0.04
)
0.01
(0.03
)
Gain from sale of investment in
privately-held company
—
0.00
—
Income tax adjustment
(0.07
)
(0.12
)
(0.02
)
Net diluted earnings per share
(Non-GAAP)
$
2.90
$
2.86
$
1.20
Number of shares used in computing net
diluted earnings per share (GAAP)
59,193,831
58,734,719
56,315,193
Stock-based compensation
939,571
1,237,266
927,219
Number of shares used in computing net
diluted earnings per share (Non-GAAP)
60,133,402
59,971,985
57,242,412
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230503005823/en/
Investor Contacts SolarEdge Technologies, Inc. JB Lowe,
Head of Investor Relations investors@solaredge.com
Sapphire Investor Relations, LLC Erica Mannion or Michael Funari
investors@solaredge.com
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